Inconsistencies Between An Offeror's Technical Proposal And Price Proposal Can Only Be Resolved In The Agency's Discretion If The Solicitation Allows

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In a decision released on June 18, 2024, the Government Accountability Office (GAO) found for a protester who argued that an awardee's technical proposal...
United States Government, Public Sector
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In a decision released on June 18, 2024, the Government Accountability Office (GAO) found for a protester who argued that an awardee's technical proposal and price proposal contained inconsistencies that could not be resolved in the agency's discretion. BAE Sys. Tech. Sol'ns & Servs., Inc., B-420860.4 et al., June 18, 2024.

The awardee's technical proposal provided that they would compensate certain high demand personnel at an above-average rate, while the awardee's revised price proposal offered average or below-average rates to those same personnel. This inconsistency was fatal to the awardee's defense against the protest.

The awardee was initially a protester. The GAO sustained the awardee's initial protest and recommended a reevaluation of proposals. Id. at 2. For its part, the agency requested the submission of updated cost proposals. Id. However, the agency further advised that no updates to any other proposals were allowed. Id.

As part of the mission capability proposal, the offerors were required to address "how compensation remains competitive when compared nationally and regionally, as well as other forms of compensation/motivation that will be used to recruit and retain high quality employees," including "proposed benefits." Id. at 6. The awardee's mission capability proposal noted that it would pay certain high demand personnel at high percentiles of salary survey data. Its revised cost proposal conveyed the opposite – its intention to pay these employees at the lower percentiles of the same data. Id. at 7-8.

Similarly, the awardee's technical capability proposal identified certain subcontractors that would work on individual task orders. However, under the revised cost proposal, the awardee disclosed that it would be reallocating workshare and the subcontractors no longer appeared. Id. at 8.

While the GAO found that this inconsistency did not violate the ground rules of the corrective action, it did amount to an unreasonable evaluation of the awardee's proposal. The request for proposal (RFP) required consistency between the narrative proposals and the cost proposal both in its plain language — the RFP stated that the technical narratives would be evaluated for "consistency with a total plan for compensation" and would be compared to the cost proposal — and by incorporating FAR 52.222-46 (Evaluation of Compensation for Professional Employees), which requires an evaluation of cost proposals "by considering its impact on recruiting and retention, its realism, and its consistency with a total plan for compensation." Id. at 9-10.

The agency admitted that it did not conduct that evaluation. Id. at 10. The GAO underscored this point by noting that the record had no analysis of "the distinction between the awardee's strategy for recruitment and retention of [high demand] personnel in the management capability proposal — that included paying above-average compensation — and the awardee's updated [below-average] labor rates." Id.

The RFP specified that cost realism would be evaluated by comparing the cost proposal to the technical proposals. Here, the agency admitted it made no such comparison. The protest was sustained for the inconsistencies and for a flawed cost realism analysis. Because the GAO could not possibly know how the agency would have evaluated the awardee's proposal when noting its inconsistencies, the protester was prejudiced, and the protest was sustained.

This outcome contrasts — an inconsistency, if you will — from past practice of the GAO and highlights the importance of reading the solicitation or RFP closely.

For instance, in Airborne Tactical Advantage Company, LLC, B-414929.2 et al., Sept. 28, 2018, at 5, the RFP stated that "inconsistencies between the technical and cost proposals may be assessed as proposal risk and could be considered a weakness under the technical factor." [Emphasis added]. Due to this possibility, it continued to state that offerors should explain "any inconsistency, whether real or apparent, between the technical proposal and the price proposal."

After discovering inconsistencies in the awardee's proposals, the agency held discussions where the awardee explained their approach and offered a change in pricing, which the agency accepted. The GAO denied the protest on this ground.

When inconsistencies are recognized in an awardee's technical and cost proposals, it serves a potential protester well to carefully review whether the agency must review the proposals for consistency or whether the agency can overlook the inconsistencies in order to make an award to a waffling offeror.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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